Late last month, the CEO of storage and moving startup Clutter emailed some of the company’s investors to say the firm was in dire straits: Clutter, which had been valued at a reported $600 million in 2019 and garnered investments from SoftBank and Sequoia, had essentially run out of cash. To stay alive, it struck a deal to be sold for pennies on the dollar to one of its business partners and existing shareholders, publicly traded Iron Mountain. Existing investors in the company won’t get their money back, according to two people with direct knowledge of the matter.

“With our cash reserves projected to run out by June 30, 2023, we ran a process for alternative sources of equity, estimating that we needed at least $20m to fully fund the business,” chief executive Rahul Gandhi wrote in the note, which was viewed by The Information. But the company wasn’t able to raise the money, triggering a senior lender to declare a default and schedule an auction of its assets, according to the email.